Question

What is the validity period for cheques and bank drafts now?

• A. 6 months
• B. 5 months
• C. 3 months
• D. 2 months

Hint:

The RBI cut this validity period through a rule that took effect on 1 April 2012.

Answer 1

The Correct Option is C

This question is about a change the Reserve Bank of India made to the validity period of negotiable instruments like cheques, drafts and pay orders.

1. 6 months: This used to be the standard validity period for cheques and drafts earlier, before the rule was revised. It is the old rule, not the current one.
2. 5 months: There was never an official validity period of 5 months for these instruments in India, so this option does not match any real rule.
3. 3 months: The Reserve Bank of India directed banks to reduce the validity period of cheques, drafts, pay orders and banker's cheques from 6 months to 3 months, with the new rule effective from 1 April 2012. This was done to reduce the risk of stale or fraudulently altered instruments being used.
4. 2 months: This is shorter than the actual rule and does not correspond to any RBI notification, so it is incorrect.

The correct option is 3 months, matching the RBI rule that came into force in April 2012.

Let's summarize:

• Before April 2012, cheques and drafts were valid for 6 months.
• From 1 April 2012 onward, the RBI cut this validity to 3 months.

So, the current validity period for cheques and bank drafts is 3 months.